Bills Digest No. 93 2004–05

WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.

The Bill s main purpose is to
amend the Australian
Land Transport Development Act 1988 (ALTD Act) the main Act
governing Commonwealth land transport funding to provide
transitional arrangements until the Government s AusLink land
transport infrastructure funding proposals commence under the
AusLink (National Land Transport) Bill 2004. When AusLink comes
into effect, no new projects can be funded under the ALTD Act.
Projects already approved under the ALTD Act will carry over into
AusLink.

Schedule 1 has two main purposes. First, it abolishes the
special account the ALTD Account and any references to it. A
special account is essentially a bookkeeping device where all
revenue and spending relevant to a particular purpose are recorded.
In this particular case, certain revenues are credited to the
special account and then used to fund roads. Second, Schedule 1
amends the ALTD Act to take account of the abolition.

At different times, the special account has been called the
Trust Fund, the ALTD Reserve and, now, the ALTD Account. But the
ALTD Act still contains references to the Reserve . The bulk of
items in Schedule 1 eliminate references to the Reserve.
Items 9, 17, 22,
24, 26, 31,
32, 33, 34,
35 replace references to out of the Reserve with
under this Act . Items 13, 27,
28 and 37 also delete references
to the Reserve.

Item 2 inserts a definition of the Auslink
transition time . This is when Parts 3 to 8 of the AusLink
(National Land Transport) Bill commence.

Comment: the road user charge, the indexation
factor and the charge rate all relate to the determination of the
amount to be credited to the special account. Technically, an
amount based on these three factors is credited to the special
account, which is then used to fund roads. The road user charge,
the indexation factor and the charge rate hark back to the time
when a notional part of the excise and customs duty on fuels was
allocated to road funding.(1) These arrangements were
put in place so that the government could demonstrate that it was
allocating some fuel excise revenue to road funding. But the amount
credited to the special account is only a fraction of total road
funding. Consequently, the road user charge, the indexation factor,
the charge rate and the special account are redundant.

Sections 4 to 8 of the ALTD Act deal with different categories
of land transport programs including roads, railways, urban public
transport, provincial cities and rural highways, and the black spot
program. Under AusLink, these categories become redundant and so
are repealed by item 10. Item 10 also repeals
sections 9 and 10 of the ALTD Act, which deal with the indexation
factor and the charge rate respectively.

Sections 11 to 14 of the ALTD Act deal with the establishment of
the special account the Reserve amounts to be credited to it, and
the indexation of the charge rate. These sections are redundant and
so are repealed by item 12.

Section 19 of the ALTD Act allows the Minister to reallocate
funds between state arterial roads and local roads. Item
20 repeals section 19 and substitutes a new
section 19, which allows the Minister to reallocate funds
from one project in a state to another project.

Comment: this both eliminates the redundant
references to state arterial roads and gives the Minister greater
flexibility to reallocate funds.

Section 26 of the ALTD Act deals with the approval of projects
and programs. Among other things, it allows the Minister to ask
various bodies to submit particulars of proposals for roads,
railways, black spots, urban public transport, research, and road
safety. Item 25 repeals section 26 and substitutes
a new section 26. In essence, new section 26
provides that when AusLink commences, no new projects can be
approved under the ALTD Act. Further, some projects approved under
the ALTD Act may not be incorporated into AusLink. New section 26
allows for continued payments for such projects. The Explanatory
Memorandum states:

This item inserts a new section 26 which specifies
that the Minister must not grant a new project approval after the
AusLink transition time. The new section continues in force
an approval made before the AusLink transition time which is not
transferred to the AusLink (NationalLandTransport) Act 2004 by a determination under
Schedule 2 of this Act.

This allows payments to continue to be made under
the ALTD Act for any projects not transferred to the AusLink
programme. It is expected that these will be projects not on the
AusLink National Network to be declared under the AusLink
(NationalLandTransport) Act 2004.

The new section 26 also continues in force any
declarations made under the Act prior to the AusLink transition
time.(2)

Item 2 of Schedule 2 empowers the Minister to
determine project approvals, made under the ALTD Act, to become
approved projects under AusLink.

Item 3 provides an appropriation of $1,
371,489,000 for the financial year ended 30 June 2005. The
Explanatory Memorandum states:

The appropriation is required as the Bill removes
the provisions establishing and operating the ALTD Special Account
which, with the Financial Management and Accountability Act
1997, provide the appropriation of funds for Australian Land
Transport Development programmes. The amount is the funding
identified in the 2004-05 Budget for expenditure on the AusLink
programme in that year. Funding in future years will be
provided by annual appropriations.

The appropriation also provides funding for
payments to be made for projects not transferring to the AusLink
legislation but remaining as projects approved under the ALTD
Act.(3)

Richard Webb
3 February 2005
Bills Digest Service
Information and Research Services

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